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Illumina, Inc. (NASDAQ:ILMN)

Q4 2007 Earnings Call

February 4, 2008 5:00 pm ET

Executives

Peter J. Froman – Senior Direction Investor Relations

Jay T. Flatley – President, Chief Executive Officer & Director

Christian O. Henry – Chief Financial Officer & Senior Vice President

Analysts

Ross Mukin – Deutsche Bank Securities

Quintin Lai – Robert W. Baird & Co., Inc.

Tycho Peterson – JP Morgan

Doug Schenkel – Cohen & Company

Derek DeBruin – UBS

Jonathan Groberg – Merrill Lynch

William Quirk – Piper Jaffray

Un Kwon – Pacific Growth Equities

May-Kin Ho – Goldman Sachs

Operator

Good day ladies and gentlemen and welcome to the fourth quarter 2007 Illumina Incorporated earnings conference call. My name is Melanie and I will be your coordinator today. At this time all participants are in a listen only mode. We will conduct a question and answer session at the end of this conference. (Operator Instructions) As a reminder this call is being recorded. I would now like to turn the call over to Mr. Peter Froman, Senior Director of Investor Relations. Please precede sir.

Peter J. Froman

Good afternoon everyone and welcome to our fourth quarter and 2007 earnings call. During the call we will review our financial results released at the close of today’s market, offer commentary on our commercial activities and provide financial guidance for first quarter and fiscal 2008 after which we will host a Q&A session. If you have not had a chance to review the release it can be accessed in the investor relations section of our website at www.Illumina.com.

Presenting for Illumina today will be Jay Flatley, our president and chief executive office and Christian Henry our senior vice president and chief financial officer. This call is being recorded and the audio portion will be archived in the investor section of our website. During the call we will be discussing our financial guidance and plans for future activity. Our intent is for these forward-looking statements to be protected under the Private Securities Litigation Reform Act of 1995. Forward-looking statements made during this call are subject to risks and uncertainties. Actual events or results may differ materially from those projected or discussed. All forward-looking statements are based upon current information available and Illumina assumes no obligation to update these statements. To better understand these risks we refer you to the documents that Illumina files with the Securities & Exchange Commission including forms 10Q and 10K.

Before I turn the call over to Christian I wanted to remind you of the investor conferences in which we’ll be participating over the next couple of months. On February 6th we will present at the Merrill Lynch Global Pharmaceutical Biotechnology and Medical Device Conference in New York. On February 14th we’ll participate at the Deutsche Bank Mid-Cap Growth Conference in Naples, Florida. On March 13th we will present at the Bear Stearns’ Healthcare Conference in London and the following week in March we will present at both the SG Cowen Healthcare Conference in Boston and the Lehman Brothers’ Conference in Miami. For those of you unable to attend any of the upcoming conferences, we encourage you to listen to the webcast presentation which will be available through the investor relations section of our website. With that, I will now turn the call over to Christian.

Christian O. Henry

Good afternoon everyone and thank you for joining us today. I hope that you’ve had a chance to review our earnings release that we issued after the close of market. During the call I will review our fourth quarter and 2007 financial results and outline our guidance for the first quarter and fiscal 2008. Jay will then discuss our commercial progress and provide an update on the state of our business and the market.

We had a fantastic fourth quarter. We recorded our 26th consecutive quarter of sequential revenue growth with total revenues of $112.6 million. This represents 86% growth over the fourth quarter of last year and approximately 15% over last quarter. This was our 10th consecutive quarter of sequential revenue growth greater than 10%. Product revenue was $101.1 million growing 105% over the fourth quarter of last year and 12% sequentially. The largest contributors to our sequential growth were the growth in revenues related to instrumentation, services revenue and sequencing re-agents. Within product revenues we generated $56.2 million of consumables revenue for the quarter compared to $32.5 million in the fourth quarter of 06 and $52.7 million in the third quarter of 2007. This represents year-over-year growth of 73% and sequential growth of 6%.

Consumables were driven by strong demand across the family of Infinium Array as well as the pull through of sequencing consumables from the Genome Analyzer. Instrument revenues continued to show significant growth both sequentially and over the prior year period driven by the rapid uptake by the Genome Analyzer. Total instrument revenue was $41.8 million in the quarter compared to $13.2 million in the fourth quarter last year and $34.1 million in the third quarter. This represented year-over-year growth of 216% and sequential growth of 23% respectively. It should be noted that we had record orders and shipments of the Bead Station as well during the quarter.

Services and other revenue which include revenue earned under our Genotyping and sequencing services offering as well as revenue related to our instrument maintenance contracts and amounts earned under research agreements with government grants was $11.5 million compared to $11.2 million in the fourth quarter of last year and $7.5 million in the third quarter this year or 3% year-over-year and 53% sequentially. As we have mentioned on prior calls our services revenue can fluctuate from quarter-to-quarter based on the timing of the completion of contract and is best assessed on a moving average basis.

Before discussing our gross margins and operating expenses for the quarter I would like to describe the effect of FAS 123R which requires us to record the expense associated with stock options in our income statement. Total impact of stock based compensation under FAS 123R for the quarter was a pre-tax amount of approximately $9.6 million or a tax adjusted amount of approximately $0.10 per diluted share. As prescribed by the standard the expense is allocated to each P&L line item with the amounts attributable to each expense category separately identified in the financial tables accompanying today’s earnings release. In the discussion that follows I will highlight both our GAAP expenses which includes the effect of 123R and the corresponding non-GAAP figures. I encourage you to review the GAAP reconciliation of our non-GAAP measures which is also included in today’s earnings release.

Cost of products and services revenue was $40.1 million in the quarter compared to $20.1 million in the fourth quarter of 06. The Q4 2007 costs includes stock based compensation expense of $1.2 million compared to $500,000 in the comparable period of 2006. Our non-GAAP gross margin which excludes both stock compensation expense and acquisition related costs of approximately $700,000 was 65.5% for the quarter compared with 63.1% last quarter and 67.5% in the fourth quarter of 2006. The year-over-year decline in gross margin was driven by the shift in product mix towards instruments.

In the fourth quarter instruments which generally carry lower gross margins represented approximately 37% of total revenue compared to 22% in the prior year quarter and 35% in the third quarter of 2007. When compared to the third quarter however, gross margins improved by over 240 basis points despite a higher mix of instruments. This was due to our ability to absorb a greater percentage of our overhead and fixed costs in the sequencing manufacturing operations as well as the fact that we are beginning to see the benefits related to the optimization of the sequencing manufacturing processes. Gross margins in the Array business of 69% were approximately equal to that of the third quarter.

Research and development expense were $20.1 million in the quarter compared to $8.8 million in the fourth quarter 2006 including $3.0 million and $1.1 million respectively in stock compensation expense. The absolutely increase in R&D dollars compared to the fourth quarter of 2006 was primarily attributable to the inclusion of Solexa’s research and development expense.

Excluding stock compensation expense R&D expenses were $17.1 million or 15.2% of revenue compared to $7.7 million or 12.8% of revenue in the prior year period. SG&A expenses were $30 million in the quarter compared to $14.9 million in the fourth quarter of 06 including stock compensation expense of $5.4 million and $2.5 million respectively. Excluding the impact of FAS 123R related stock compensation expenses SG&A was $24.6 million or 21.9% of revenue compared to $12.4 million or 20.5% of revenues in the prior year period. Growth in SG&A dollars can be attributed to the year-over-year inclusion of Solexa but also to the significant and ongoing investments that we are making in our commercial infrastructure to support our rapidly growing install base.

Despite the incremental operating costs associated with the integration of the Solexa business our non-GAAP operating profit for the quarter was over 28% of revenue or $32.1 million which exceeded our long term operating model. This compares with the prior year period of 34% or $20.7 million. We continue to make great progress with the integration of the two businesses and are demonstrating our ability to leverage the combined resources and infrastructure of the merged companies.

On a GAAP basis we reported a net loss of $4.1 million for the fourth quarter or $0.07 per basic and diluted share compared to GAAP net income of $17.1 or $0.34 per diluted share in the prior year period. The GAAP net loss was attributable to the recognition of $54 million of a $90 million payment to settle all ongoing legal disputes between Affymetrix and Illumina. This payment was partially offset by a net tax benefit in the amount of $25.3 million primarily attributable to the reversal of the company’s valuation allowance against its deferred tax assets. Excluding the impact of the settlement, stock compensation expense, certain tax benefits and acquisition related charges we are pleased to report non-GAAP net income of $22.5 million or $0.38 per diluted share compared to $21.2 million or $0.42 per diluted share in the fourth quarter 06.

Looking at the cash flow statement and the balance sheet, we generated $11.6 million in cash flow from operations compared to $8.8 million in the prior year. Accounts receivable DSO improved during the quarter to 67 days from 75 and going forward we continue to expect DSO to fluctuate from quarter-to-quarter based on our mix of revenue from both a geographic and product perspective. Inventory turns in the fourth quarter improved slightly over Q3 from 3.2 to 2.9 as our total inventory balance increased by $8.7 million. We used approximately $9.1 million in cash for cap ex during the quarter primarily related to the expansion of BeadChip manufacturing capacity. Depreciation and amortization for the quarter were approximately $4 million.

I will now take a minute to update our financial guidance for the first quarter and for fiscal 2008. Consistent with our previous calls the following guidance excludes the impact of certain non-cash charges including the amortization of intangibles, the legal settlement payment and the impact of stock based compensation related to FAS 123R. For additional details please refer to the table in our earnings release that reconciles our non-GAAP guidance to the related GAAP figures.

We expect fiscal 2008 revenues to be between $500 and $525 million representing growth between 36 and 43% which is at or above the high end of our long term operating model. We expect gross margins for the year to range in the mid 60s and may be variable quarter-to-quarter due to product mix. We expect non-GAAP earnings per share to range from $1.45 to $1.60 with a pro forma fully diluted shares outstanding to be approximately 62 million. Going forward we will provide a pro forma fully diluted share number that will exclude the double dilution associated with the accounting treatment of our convertible debt outstanding and the corresponding call option overlay. As a reminder, the call option that Illumina owns offsets all dilution associated with the net share settlement of the note over its conversion price of $43.66. We will include the ongoing economic impact associated with the net share settlement of the convert as it relates to the warrants that were issued in conjunction with the overlay which have a strike price of $62.87. The fourth quarter number is included in the reconciliation to GAAP figures that accompanies today’s press release. Please feel free to follow up with myself or Peter following the call today so we can walk through any details of the calculation.

In the first quarter we expect revenues to range between $110 and $115 million which represents year-over-year growth of 52 to 59%, well above our long term models. Excluding the impact of stock comp expense and the amortization of intangible assets related to the settlement with Affymetrix and the acquisition of Solexa, we expect first quarter non-GAAP earnings per share to range from $0.33 to $0.36 assuming pro forma fully diluted weighted average shares of approximately 60 million. We anticipate a non-GAAP annualized tax rate of approximately 36% for 2008. We expect the tax rate to be higher in the first and second quarters of the year and lower in the third and fourth quarters as we begin to ship products from our Singapore site in the fourth quarter.

As more income is generated from international locations and as we complete the build out of Singapore we expect our long term tax rate to decline over the next couple of years. We expect annual stock compensation expense to be approximately $40 million or $0.65 per fully diluted share. As we have emphasized in the past the expense is highly dependent on our underlying stock price. As I mentioned earlier in the fourth quarter we recognized as a litigation settlement expense $54 million of the total $90 million paid to Affymetrix. The remainder of the payment has been capitalized as an intangible asset and will be amortized over the life of the patients involved. In 2008 we expect to amortize approximately $4.5 million of the intangible assets on a ratable basis.

At this point I’d like to turn the call over to Jay for some remarks on our commercial activity during the quarter before we begin our Q&A sessions.

Jay T. Flatley

Good afternoon everyone. I’m pleased to report to you today that Illumina had another break out year. We generated 99% top line growth driven by the ongoing strength in our core genotyping market as well as the remarkable uptake of our Genome Analyzer. We announced last month that we had shipped over 200 Genome Analyzers representing a sales trajectory that exceeded even our best case forecast for 2007. The ramp of the Genome Analyzer is in many ways directly attributable to the success that we had with the integration of the Solexa product and their team into Illumina. The core assets of the companies have now been combined to form one of the leading product portfolios in our industry.

Over the course of the year in the Array business we launched 14 new products highlighting our ability to innovate at a market leading pace. In addition to rapid new product introduction we’ve made major breakthroughs in our core Array manufacturing processes, increasing sample capacities by 170% and data point capacity by 350% all with modest capital investment. In the fourth quarter we grew sequential revenue for the 26th consecutive quarter with impressive growth across the business. In the Array business we continue to see very rapid product cycles with the products that we launched in the last two quarters representing the greatest contribution to total BeadChip growth. Our Human1M BeadChip which began shipping at the end of the second quarter became our largest revenue generating Array in Q4 followed by the hap550-due which began shipping in Q3.

In addition to the success of the whole genome products our [inaudible] platform had another impressive quarter and became our third largest revenue generating Array product. As a reminder the iSelect is our BeadChip format that enables researches to interrogate over 60,000 snips of their choice across 12 samples. The rapid uptake of these products demonstrates the market’s strong demand for the high performance genotyping technology provided by Illumina’s BeadArray platform.

We began shipment of iSelect at the end of the first quarter last year and have expanded the platform to include several targeted panels developed with a number of customer consortium. Just recently we launched the CVD SnP55 in collaboration with researches from the University of Pennsylvania, the Broad Institute and the (CARe) Consortium to target SnPs in candidate genes associated with cardiovascular diseases such as myocardial infarction, heart failure and stroke. We also recently announced three animal focused panels. The first is the Bovine SnP50 which was developed through collaboration with the US Department of Agriculture, the University of Missouri and the University of Alberta. It includes over 50,000 SnPs for selective breeding of desirable traits among cattle populations. The Bovine SnP50 is a great example of the power of Illumina’s integrated product portfolio.

We used our sequencing surfaces business to discover approximately 23,000 novel Bovine SnPs, added them to the 30,000 previously known SnPs and then rapidly introduce the multi sample customer array. This is a strengthen and capability unique to Illumina. The second animal panel we introduced is a Canine SnP20 developed in collaboration with the Broad Institute from date from the dog genome sequencing project. A third panel which was announced at the Plant & Animal Genomics Conference just held recently is the Equine SnP50 which is currently under development with researchers from the University of the University of Minnesota and the Morris Consortium. Both of these products are intended for veterinary and breeding applications.

Early in 2008 we announced the launch of our Infinium HD BeadChip family which is the most significant new development in Illumina’s micro Array business since the introduction of our original [Infinium] BeadChip. [Infinium HD] or high density is a brand new family of BeadChips that more than doubles the number of data points per chip. Infinium HD also supports an improved Assay offering customers higher sensitivity and the lowest DNA sample requirement in the industry. The first product launched in the family is the Humanhap-610quad which combines the content from our Hap-550 duo and the HumanNS-12 arrays and doubles the throughput capabilities per room. This product will ship during the first quarter.

The second product launch that we announced is the human1M-Duo. This chip uses the same substrate as the 610quad with a different gasket configuration to deliver the content of our flagship Human 1MB chip and two sample formats. We’ve also enhanced the content to the 1M duo to include recently identified diseases associated in SnPS and high density SnPs in coding region of the genome. The Infinium HD family also increases capacity in our manufacturing process. With record orders in Q4 and a record backlog entering 2008 we’re currently running at 100% capacity. As Infinium HD becomes a larger percentage of our total BeadChip volume we will recognize significant manufacturing capacity gains.

We’re extremely excited about the continued improvements our teams have made in the Infinium product line and the flexibility that the new chip format will provide. We believe that the unparalleled quality and performance of the Infinium HD product family will fuel robust growth in the genotyping market over the next few years both for genome wide association and for targeted studies. In fact, just over a week ago we announced that the Erasmus Medical Center has purchased 610-quad BeadChips for whole genome analysis of 10,000 samples to identify environmental and genetic contributors to development from birth to young adulthood. Illumina’s technologies enables researches such as those at Erasmus to accelerate their discovery efforts at an unprecedented pace.

In 2007 our BeadChip technology was utilized for research in over 50 journal publications for genome wide association, CNV and methylation studies compared to 25 in 2006. For genome wide association studies alone, we saw over 35 publications compared to just three in 2006. These examples are representative of the remarkable dynamic that we’re seeing in the genotyping market all of course, fueled by the incredible pace of innovation. The market size continues to grow robustly as improved economics are passed on to customers. Supporting this view of market elasticity, our year-over-year BeadChip sample volume grew 340% to over 530,000 samples.

Turning to the sequencing business now, after the end of the quarter we announced that we shipped over 200 Genome Analyzers to date including the 14 that were shipped in advancement of the Solexa acquisition. This rapid adoption of the Genome Analyzer represents what we believe to be the beginning of a significant change in the dynamics of the sequencing market. For the first time individual researchers can rapidly and affordably conduct projects that once required substantial instrumentation expense, large operational budgets and years of human capital. Individual researchers with one Genome Analyzer are now generating high quality data in single runs which previously took large teams of researchers running dozens of instruments months to produce.

In Q4 we continued to see this democratization of sequencing as two thirds of our business is outside of the major genome centers and broadly distributed geographically. In addition to our diversified and growing customer base we’ve also seen a wide range of applications being run on the Genome Analyzer. Last quarter we launched a Chip-seq kit that enables researchers to run optimized protocols to the analysis of protein DNA interactions on a genome wide scale. This product adds to the digital gene expression kits we launched in Q3 for MRA tag profiling and small RNA discovery. We’ve received very positive customer feedback on these protocols and see the market excitement around migrating specific applications to sequencing that have traditionally been run on micro arrays. Just this past quarter we saw that over 60% of new [Ncode] grant recipients specified that they would use next gen sequencing platforms including the Genome Analyzer for applications such as chromatin immune precipitation, digital gene expression and DNA methylation.

The raw throughput and scalable economics of next generation sequencing is now allowing researchers to tackle projects that they previously had thought unthinkable. Two weeks ago an international consortium of genome centers announced a 1,000 genome project which will sequence the genomes of at least a 1,000 people to better understand genetic variation as it relates to human health. The Genome Analyzer will be among the next generation platforms that will enable this project and a deeper understanding of the human genome that will come from it.

While we’re enthusiastic about the market opportunities in front of us we’ve been relentless in pushing the technology forward as well. We announced last month that we’re consistently generating internal sequencing runs of over 3g of high quality data. More importantly, we have a very clear internal development road map to drive throughput, lower cost and broaden the scope of applications on the platform. Later this week at the 208 AGBT meeting which is widely regarded as the most important sequencing conference in the industry we expect to hear beta site customers present data from their experience from paired end runs on the Genome Analyzer. As I mentioned before this technology provides much longer range information than individual sequence reads and is key to detecting inserts, deletions and structural variations in the genome.

Many of you likely saw the press release we issued last month in which we announced the reorganization of our operating structure into two distinct business units. This change will address a number of key priorities for Illumina as we manage our rapid growth. First, the creation of a life sciences business unit which will include our Genome Analyzer, BeadArray reader and BeadExpress platforms, will more actively exploit the natural synergy between sequencing and genotyping. Second, the creation of a diagnostics business unit will focus our diagnostic strategy and provide the leadership required for Illumina to realize the value from our discovery and validation platforms. Third, this new operating structure will serve as a scalable foundation to support our next stage of growth.

We’ve hired general managers to run both of these businesses. These new leaders are transitioning from their current roles but will both be on board by April 1st. We will issue detailed press releases when they join the company. Last quarter we also press released that John West, former CEO of Solexa announced his resignation from the company. Last Friday was John’s last day at Illumina. We thank John for his stewardship of Solexa’s integration into Illumina and also for his tremendous contributions in cultivating the next generation sequencing market. We wish John the best of luck in his new endeavors. We also announced that John Stuelpnagel will move to part-time status effective April 1st after having spent 10 years building and leading Illumina from its inception. We look forward to continuing to benefit from John’s experience and vision on numerous projects as he will advise the company as an Illumina fellow.

To conclude we’re delighted with our operating results and we continue to be highly optimistic about the strength of our markets. 2008 will be another exciting year for the company, a year that holds significant challenges and opportunities for Illumina but we believe we have the team and technology platforms in place to deliver on our commitments to our customers and to our investors.

Thank you for your time and we’ll now open the line for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Ross Mukin at Deutsche Bank. Go ahead.

Ross Mukin – Deutsche Bank Securities

On the consumable pull through for the Bead stations can you talk about obviously now the HD product is coming to market, what does that do on sort of an annual basis in terms of consumable throughput per instrument. Should we see that likely trend up? Stay constant? Trend down? What’s sort of the trajectory there at that piece of the business?

Jay T. Flatley

Well, the consumables per Bead station Ross as you know, has been running sort of in the range of $600,000 per year per installed unit and we have continued to sort of run in that range. Probably what you’ll see with the new chips is somewhat of an uptick in that number over the next few quarters and then sort of consistent with our previous discussion it will probably drift down after that as we continue to install Bead stations more broadly in the market and the average utilization rate across the entire installed base goes down some. The second consideration is also the fact that we are running right now at 100% capacity in the production of BeadChips. So, we could probably ship more BeadChips from a demand perspective than we currently have on the supply side although we’re working really hard to make sure that we’re trying to keep up with the market and getting better at that over the next couple of quarters.

Ross Mukin – Deutsche Bank Securities

And on the sequencing of the business could you talk a bit about sort of customer adoption and ordering habits based on sort of the different groupings whether its genome centers, core labs, the ag bio guys, any pharma biotech, sort of what you’ve seen in terms of the initial rounds? Have we seen customers come back and do multiple orders? Just sort of set the landscape for how it’s sort of developing in the different customer groups.

Jay T. Flatley

Let me start that off and Christian may have something to add to it. I would say overall that the customers that have had these units in their lab now for more than a quarter are beginning to put them into true production environments and we’re beginning to see some of the genome center customers take these from sort of the situation where they’re exploring range of application and different technologies and different parameters with the system and pushing them into true production environments. So, we’ve begun to see very strong repeat orders from these customers, on the consumables side. It’s a little early to know exactly where the consumable per system is going to shake out but we continue to feel good about our estimates that it’s sort of in the $150 to $200,000 ranges as we begin to be able to measure that more consistently.

Christian O. Henry

On a new unit placement basis, two thirds of our instruments are going to outside of the genome centers and the fourth quarter was no exception quite frankly. What we’re seeing is we’re seeing a broad uptake in all of the geographical territories with the kind of smaller midsized customers as well as the genome centers. So, this truly is in our view, it’s a very broad adoption. I would say that this broad of an adoption probably surprised us a little bit if you go back to the beginning of the year and thinking how this was going to roll out. But, we’re pleasantly surprised and it’s really due to the breadth of applications. The fact that we’ve got protocols that you can buy kits right off the shelf and as Jay pointed to the consumable ramp really started helping this quarter so that kind of gives you a general picture of what’s going on in the sequencing side of the world.

Ross Mukin – Deutsche Bank Securities

Lastly, on sort of the SG&A and headcount front the growth trajectory here continues to be at sort of a rate we’ve never seen before from any company in this space. Can you talk a bit about the challenges around expanding headcount and being able to keep up with this sort of hyper normal top line growth and does that pose challenges down the line from a customer service perspective?

Jay T. Flatley

Well, we are aggressively adding people as you know and you saw us make some significant progress in that in the fourth quarter, particularly in the sales and marketing side that we were able to bring more people in the fourth quarter and get closer to our plan. Going forward we’re going to need to add more people particularly in the sales and marketing side but, we’re pretty optimistic about our ability to do that. We are starting to get better at training people internally, we’re setting up what we call Illumina University to allow us to do that more effectively and what that permits us to do is hire people that are somewhat less experienced and start to grow our own people in the sales and marketing side of the business and tech support of course as well. So, that’s beginning to help enormously. One of the challenges of course is to make sure as an organization that we keep our hiring standards high so that’s an area that the senior management team is of course very focused on to ensure that we don’t compromise on the types of employees that we’re hiring into the company.

Operator

Our next question comes from the line of Quintin Lai with Robert W. Baird. Go ahead.

Quintin Lai – Robert W. Baird & Co., Inc.

As you’ve been on the forefront of two of the fastest growing dynamic markets both genotyping and next gen sequencing could you give us a little bit of perspective kind of how those two are mimicking each other with respect to the development? Because, you kind of made comments in the prepared remarks that genotyping has seen a lot of product evolution and pickup in less than let’s say two quarters. Could next gen sequencing go through that similar type of evolution?

Jay T. Flatley

What we see in the genotyping side Quintin is a very rapid evolution of the chip so the instrumentation hasn’t evolved all that quickly but, we continue to figure out ways of packing more information on chips and broadening the application base. In that sense it’s somewhat analogous to what we’re seeing in sequencing, we’re continuing to figure out ways to improve the performance of the system. When we acquired Solexa back earlier in the year the instrument was sort of capable of about a 1g throughput and now we’re routinely getting 3g throughput. We’ve broaden the types of applications that we run on the system so that makes it appeal to a much larger audience of potential customers. So, I guess in that way we do see some parallels between what is happening in genotyping and sequencing. And, there’s no doubt that the pace of innovation in both these markets is going to continue to be very rapid.

Quintin Lai – Robert W. Baird & Co., Inc.

In genotyping primarily you compete with another major competitor, if you would give us a little bit of update there. But then, in next gen sequencing not only do you compete with several people but then you’ve also got all these other new potential players trying to enter the market so could you kind of compare and contrast the competitive landscapes for both right now?

Jay T. Flatley

I think on the genotyping side we continue to make great progress there, our competitive position is very strong, we continue to have the ability to command premium prices because of the breadth of the product line and the quality of the chips. So, not a lot of change in the competitive dynamics on the genotyping side and we feel really good about sort of the future of our technology there. On the sequencing side you’re right, in the long run there’s certainly going to likely be more competitors but today we’re really competing against one or two companies and what we need to do as an organization is make sure that we continue to innovate very rapidly so that we can be the company that’s still ahead two or three years from now. It’s clear, if you just do an installed base count that we’re leading in the next generation sequencing market right now but, the imperative is to ensure that we continue to have that position a couple of years from now so we’re very focused on that. In fact, one of the reasons that we pulled together the array and sequencing businesses is to bring more clarity to how we do that and get these technologies really rev’d up to make sure a couple of years from now we’re the leading company.

Quintin Lai – Robert W. Baird & Co., Inc.

One quick question and I’ll jump back in the queue, Christian did you say that stock based comp in 08 was going to be $40 million expense and $0.65 of EPS? Was that pre-tax?

Christian O. Henry

Actually, it is pre-tax but there’s not going to be a huge difference between pre-tax and after tax on that line because we flipped our valuation allowance in the fourth quarter and therefore you change the way you think about the accounting from a tax perspective of the stock comp expense. We did just over $33 million in stock comp this year, or something like that so we’re adding roughly $7 million or so for the full year effect of all the people we hired. If you think about it we ended the year with over 1,000 employees, we added almost 500 employees in 2007 and we’ll probably add similar kinds of numbers if not a little bit more in 2008. We have moved and changed our stock option granting practices, we’ve actually eliminated many of the different levels that get stock options, we’ve moved to restricted stock so we’re working to mitigate that expense somewhat by lowering the amounts and changing the nature of the grants. But, the reality is when you’re growing as fast as we are it’s an important incentive and we’re going to need to keep doing that.

Operator

Our next question comes from the line of Tycho Peterson with JP Morgan. Please go ahead.

Tycho Peterson – JP Morgan

Actually Christian maybe just following up on the last comment you made about headcount addition, I’m just trying to think, I know you’ve backed off from giving SG&A guidance specifically but can you give us a sense – you know, it was a little bit higher in the fourth quarter, was that predominately from headcount additions? Or, were there other factors in there i.e. legal things that we should think about getting backed out going forward?

Christian O. Henry

There was some legal in there as well but we did add a lot of headcount in customer support and sales and marketing. So, I would say yes legal was a contributing factor in terms of external legal expenses which I’m happy to report that that number should be getting lower as time goes on here. But, there was a probably bigger contributing factor of headcount in the number.

Jay T. Flatley

We actually had to do a catch up from Q3, we were probably a little behind where we wanted to be in Q3 and we were more successful in bringing those people on in Q4.

Christian O. Henry

That’s right.

Tycho Peterson – JP Morgan

Maybe just broadly, can you give us a sense of where you’re hiring? Are these geographic reps or are they adding new capabilities in house?

Christian O. Henry

We are hiring a lot of folks internationally in terms of both sales and customer support. If you look at 2008 we’re also going to be opening up our plant in Singapore so we’re adding a lot of headcount there. Jay, do you have anything to add there on that one?

Jay T. Flatley

No. I’d say we’re biased a little more heavily in 08 towards strengthening Europe and Asia and our business is very strong in North America. We have a great team on the ground here. If anything, we’re probably a little bit lighter in Europe and Asia so we’re a little biased in that direction.

Tycho Peterson – JP Morgan

With the Infinium products you talked about Jay earlier, can you give us a sense – you talked about some of the initial genome wide association work and some of the targeted space, longer term are there other markets that are going to be opened up here and how do we think about where do you see the demand going?

Jay T. Flatley

Well, we continue to discover as do our customers, new ways of using these array technologies. If you think about it the whole area of copy number variations now is very important area of study and a couple of years ago nobody even talked about copy number variation. We certainly have the ability now to implement methylation on chips and we’ve announced a couple of products, one Infinium based, one Golden Gate based using methylation so we think that’s going to be a very important market going forward and in the study of cancer it could drive a very large opportunity there. It’s still early to tell how large it’s going to be but we’re pretty optimistic about it. As we learn more about the genome particularly through these large scale sequencing efforts it’s going to spawn many new and interesting ways to use chips as we discover more about the content and structure of the genome and have the ability to build out that content into a more defined way on a arrays. So, that’s again a way that sequencing and chips are going to work together during the future.

Tycho Peterson – JP Morgan

One last one for Christian on the tax rate, can you give us a sense when you think that starts to come down? Is it really kind of 09 post the Singapore ramp?

Christian O. Henry

Well, I think the tax rate in the second half of the year will be better than the first so technically I think in the back half it will get better. But, we won’t really get the full benefit of Singapore so to speak for a full year here so 09 is when you should see it come in. And of course, it’s really dependent on how much we manufacturer over there and consequently how much of our income is kept offshore because that’s what’s really driving the tax rate down. So, it will also be dependent on growing ex US revenues which one of the reasons why you see us hiring a lot of people in Europe and in Asia is because we see such a large opportunity in front of us there.

Tycho Peterson – JP Morgan

Given kind of the headcount addition, you laid out some pretty clear kind of three year pro forma operating targets at your analyst day, have there been any changes to your view on that kind of 20 to 28% operating margin target longer term?

Christian O. Henry

Not at this point. We are performing inside those ranges if not slightly better than the midpoint for the most part. We’re obviously trying to build the best business we can. But, I think here in 2008 we need to make sure that we’re investing so that in 2010, 11, 12 we’ve got truly a global leading life sciences business.

Jay T. Flatley

I have one more comment on your first question on the growth over [inaudible], one thing I didn’t mention was what we think is going to be really exciting opportunities in non human application so the emergence of the ag market as we can develop chips that are very inexpensive for sample. It opens up large scale screening applications in the ag space and also again, the use of the sequencer to do discovery in other organism that haven’t been sequenced before opens up brand new opportunities to use dedicated chips to do screening. Then lastly, we’ve talked a lot about the emergence of the consumer genotyping market, we think that’s going to be a huge growth area over the next few years as well.

Tycho Peterson – JP Morgan

Can you just comment on how that’s going? I know, they’ve launched in Europe now and in Canada as well.

Jay T. Flatley

It’s going real well. We’re not announcing specific volumes but the uptick is good and the lab is busy and they have broadened it as you indicated there, so they began really only in the United States and have now launched this internationally. It’s early but we’re optimistic.

Operator

Our next question comes from the line of Doug Schenkel with Cohen & Company. Go ahead.

Doug Schenkel – Cohen & Company

Maybe I’ll just start with a quick follow up to one of Tyhco’s questions. At your analyst day in September I believe you talked about a three year tax rate of 28 to 32%. Give you’re guiding 36% this year does this guidance still apply? Clearly, I’m just trying to get at a potential tax savings number associated with the Singapore expansion.

Christian O. Henry

I don’t think there’s any significant changes I mean we flipped our valuation. We had a lot of things going on in the tax in the fourth quarter of course and 2007 was kind of lump for a lot of different reasons but, when you look at 2008 we’re considering possibly having the Singapore plant online sooner which would have created a lower tax rate but where it is we feel comfortable and we’re going to be launching Singapore. But, I don’t think that really impacts 2009, 2010 it really just kind of impacts this current year.

Doug Schenkel – Cohen & Company

Quarterly updates from you and some of your competitors suggest that genotyping demand remains pretty robust and the fact that genome expression demand may be rebounding although that’s probably pretty modest. Given you talked about chip production being at capacity, I think you’ve been close to this rate of capacity for a little while. How are you actively or proactively managing the risk of losing share? Are you comfortable others aren’t gaining share at your expense due to capacity constraints?

Jay T. Flatley

We’re pretty convinced that our share is staying stable sort of at the worst and the business is very robust. We are working on the capacity constraints actively and so we’re adding new systems into manufacturing almost every day to build capacity. One major change we’re going to have as I alluded to in my remarks is that the Infinium HD product line going to a quad based 610 and a duo based chip for the 1M will radically improve our capacity in terms of the number of chips we can produce. So, that’s going to be a huge help as those products come on line over the next three or four months and that gives us a step function change in capacity. So we’re pretty comfortable with where we’re going to be in the second quarter. With respect to expression, yeah our expression business has been very good as well and it grew nearly 100% year-over-year.

Christian O. Henry

Doug, one thing I did make in my remarks is the biggest component of cap ex this quarter was manufacturing equipment for BeadChips. We’re adding capacity, as you might be aware we make our own manufacturing equipment and we’ve got a production line that is going. It’s actually one of the competitive advantages that we have is that the cost of the equipment is actually pretty modest and our ability to modulate capacity is pretty good in say a two or three month window here. So, we’re at capacity every week right now.

Doug Schenkel – Cohen & Company

That’s great. I was going to ask, the investment you guys have made and are making there puts you in a position where even in advance of Singapore it’s fair to assume you can be expanding within one to two quarters, correct? Based on what you just described?

Christian O. Henry

Yeah.

Jay T. Flatley

We’re expanding continuously.

Doug Schenkel – Cohen & Company

Okay.

Christian O. Henry

Just to reiterate what Jay said, when all of a sudden you can put four samples on one chip versus two samples, that dramatically increases your capacity. As Jay said it’s truly a step function so as we start shipping those chips later this quarter we’re going to see some major relief there.

Doug Schenkel – Cohen & Company

That makes sense. Can I just ask one more on sequencing? Now that we’re almost a year into the next gen roll out, especially given that you talked about two thirds of recent placements being made outside of the large labs can you talk about any challenges that are more specific to these labs? Do you have any plans to go further in facilitating data processing and data managing as a competitive differentiator with this part of the market?

Jay T. Flatley

Yes, we will. I think the biggest challenges in the small labs are in the incramatic side having both the compute infrastructure number one and also the ability to sort of run the software and do the data analysis. So, we are working very hard on sort of the back end of our product line which is making the analysis software package more and more shrink wrapped for that market if you will and we’re making good progress there. It’s not fully available yet but it will be and we’re also doing things like defining very clear computer configurations for those customers. We have a program underway that is going to help dramatically reduce the amount of data that actually comes off the system and that new capability will come to the market fairly quickly and provide great relief for not only the single use customers but for the genome centers.

Operator

Our next question comes from the line of Derek DeBruin with UBS. Go ahead.

Derek DeBruin – UBS

When you look at the DNA sequencer launches and what’s going on, you shipped 200 of them, I mean could we potentially be looking at a situation where you’ve got a bolus of launches in 2008 and then things potentially trickle off a bit? I’m just trying to get a sense for what is really the potential run rate for DNA sequencer placement in side of the market.

Jay T. Flatley

By bolus of launches do you mean other players coming in to the market?

Derek DeBruin – UBS

I mean you’re shipping a lot out this year, or you’re going to be shipping a lot out. I’m just wondering if you guys are going to have a massive initial uptake and then things trickle off a bit? I’m wondering how you see instrument placements of the 1g going forward?

Jay T. Flatley

We don’t think that’s how the markets going to roll out. We see very broad demand, lots of people putting in for significant funding to participate in this market, the emergence of very large programs like the 1,000 genome program and many more like it that are of scales that no one has talked about before. The sequencing demand in the marketplace, we characterize it as literally insatiable for at least the next 10 years if you look at all the types of sequencing researchers would like to do in human and then all the other organisms, all the cancers. If you snap all that out we can’t [inaudible] enough sequencing capacity so it really comes down to the level of funding that’s available and we believe that’s going to be very robust over the next few years.

Derek DeBruin – UBS

So you wouldn’t think that something of 200 system placement run rate on an annual basis is unusual?

Jay T. Flatley

Nope.

Derek DeBruin – UBS

Okay. Looking at your R&D expense are you still comfortable with the idea of something in the 15 to 17% range going forward?

Jay T. Flatley

Sure. We’re comfortable with that.

Derek DeBruin – UBS

When you look at the DNA sequencers do you have any good idea yet what the consumable pull through is going to be per instrument?

Jay T. Flatley

Well, we’re starting to get some early indicators but these early data points are going to be a long a curve that’s going to get us to more the steady state. Our best estimates that we had previously we think are still our best estimates and that’s $150 to $200,000 per installed instrument. I’d say two quarters from now we’ll probably be in a place where we’ll have enough points on the curve where we’ll start to really know what the number is but, it’s a little too early to say we know what the number is.

Derek DeBruin – UBS

Just a housekeeping question, I might have missed it, the cap ex guidance for 2008?

Christine

We actually didn’t give explicit guidance for cap ex. But, we’re going to have a big year for cap ex because we’ve got a lot of facilities expansion projects going on so it probably will be just north of $40 million or so in total cap ex, somewhere north of that and I’ll keep you updated as we move along. But, we’ve got our Singapore expansion, we have actually two expansion projects in San Diego one related to manufacturing, two and expansion to our corporate headquarters and we also have an expansion project in the UK where we’re going to be adding another 40,000 square foot building to support our European base of operations.

Jay T. Flatley

But, that actually substitutes for the space we already have so it’s not incremental to the space, it’s just a new building.

Christian O. Henry

Yeah but there will be cap ex associated with building it out though. It’s a big year. We did $24 million or so this year so it will be our biggest year in cap ex at least since I’ve been with the company since 2005.

Derek DeBruin – UBS

Just one final question going back – I’m just getting dinged from a lot of questions from the investors on the stock options guidance and so roughly you were saying that essentially the pre-tax and after tax were essentially the same?

Jay T. Flatley

Yeah, they’re pretty close. That’s right.

Operator

Our next question comes from the line of Jon Groberg with Merrill Lynch. Go ahead.

Jonathan Groberg – Merrill Lynch

My question is going to maybe tie in a number of things that have been brought up but, the biggest thing as you talk with investors, the biggest concern that everyone has is everyone thinks that in this space a company like yours is destined to collapse as we’ve seen just about every other one do at some point. They hear the story of you predicting very strong revenue growth but saying things like, the very rapid product cycles which theoretically could allow competitors to also take some share in those product cycles. They hear things like two thirds outside the genome centers but, are you having challenges in the genome centers, notwithstanding what you just said about sequencing. They hear about the expansion to Singapore and there was a very well known competitor of yours that kind of went through this process of expanding to Singapore and things kind of collapsed when they didn’t match capacity with revenue growth. It’s a fairly nuance question but on one hand what gives you the confidence in the revenue growth numbers that you put out there? Then two, can you maybe describe how you’re moving to Singapore? Is it also staged in a sense how you expand your production there? How do you ensure that you don’t have excess capacity in the case that the revenues don’t materialize as you expect?

Jay T. Flatley

There were a lot of questions embedded there; let me give it a shot. I guess to answer the question most generally I think all of the concerns that you began with relate to the quality of execution and as a company we have been very focused historically and going forward on how well we execute, how good our systems are, how well our processes work, how rapidly we can grow our products, how efficiently we can do that and we have no reason to believe that we’re going to get any worse in that as we scale up.

One of the challenges that many companies have is that they do grow very rapidly and if they don’t have the infrastructure in place as they enter those rapid growth curves the infrastructure falls apart because they don’t have the process in place to support it. As a company we’ve invested very heavily historically in building those processes and they’re working. I guess, at 30,000 feet that’s what initially gives us a fair amount of confidence.

If you look specifically at the revenue ramp we measure our pipeline in lots of different ways. We have a very strong backlog, we have a very strong pipeline of business that we expect to come our way. We measure that on a statistical basis so we assign probabilities to all of the deals we have in the pipeline as they move through our pipeline and we have a rich family of new products coming to the market over the next 12 to 18 months. So, I guess all of those things combined with what we see happening on the demand side from the market make us feel pretty certain about our guidance.

In the case of Singapore one of the reasons that we decided to slow that down a little bit and do it in Q4 instead of Q3 was to make sure that we could do it very, very smoothly. As we talked a little earlier, our capacity increments are pretty small so we have the ability to move over five or 10 decoders into Singapore and begin to shake those out without having any impact on the capacity here in San Diego. Get it ramped up, get the processes all established and then ship the next 10 over to Singapore. We can do this in a gradual way, if it goes well we can do it faster, if we have any issues we can go a little slower. It’s a very manageable process, the lease is done on the building so all of that’s in place and we’re starting to look at the hiring side of it. So, we’re pretty confident we can pull that off without too big a hiccup.

Christian O. Henry

I think the other thing Jon is that we still have space in San Diego to increase our capacity and we’ll be building out all of our capacity in San Diego. Our intent is to really use Singapore as our incremental capacity so that’s another key reason why we think maybe we can do it in a different way than some others have. One thing that I could say is as Jay pointed out system wise, we have better visibility into our pipelines than any company that I’ve ever been at. I think that gives us a sense of knowing, or at least understanding where the opportunities are. Now sure with any plan there’s always risks and execution challenges but, if you look at what we’ve been able to do over the past three or four years I think it would be difficult to argue that we have not been able to execute. So, as we scale we’re just keeping our heads down focusing on what’s important and that’s driving this opportunity.

Jonathan Groberg – Merrill Lynch

Just a couple of questions then maybe about competition, or market share, Jay I think you mentioned on the array side you thought your share was stable at worse and then talking about genotyping specifically have you noticed I think before it was much better than stable at worse, I think you were gaining quite a bit of share. Have you noticed a change in dynamics there? I think you mentioned your gross margins in that business where steady so I assume SPs for the chips themselves are steady but maybe if you can just talk about the competitive dynamics there. Then also, obviously you have a big competitor who’s just recently launched on the sequencing side and you can maybe discuss the competitive environment that you’re seeing on that side as well.

Jay T. Flatley

I mean in general as you know it’s a very competitive space and we have great competitors in both the array and sequencing business. We think on the array side the competitive landscape has been pretty stable. We’ve seen huge growth in our multi sample products in particularly the iSelect 12 by 1 and that’s an area where we really don’t have competition and that part is growing substantially. I think in the whole genome side we continue to do extremely well there in addition. So, we feel real comfortable with what’s going on in the array part of the business.

In the sequencing side you’re right there is a very large competitor we have in that space who has been the largest player by far in the sequencing market and they’re going to be a player in this market. So, the question really is what are the relative market shares going to be going forward and we just keeping working really hard to improve the performance of our system at a rate that keeps us ahead of the competition. But, there’s no doubt that it’s going to be a competitive market with that competitor and others in the future.

Jonathan Groberg – Merrill Lynch

Last question, just a quick question on another call [inaudible] USB mentioned that they were a supplier to some of their competitors and they were going to reevaluate or analyze that. I’m just curious is USB a supplier to you guys?

Jay T. Flatley

I don’t think we have any risk there that we know of.

Operator

Our next question comes from the line of Will Quirk with Piper Jaffray. Go ahead.

William Quirk – Piper Jaffray

Can you just give us a quick update on the Genome Analyzer manufacturing capacity? You’ve commented in the past about expansions here and I guess I’m trying to figure out if we should be thinking about more of a kind of ongoing improvement to expanding capacity here or is this a situation where we need to add more lines or more shifts, etcetera?

Jay T. Flatley

On the sequencing stuff?

William Quirk – Piper Jaffray

Correct.

Jay T. Flatley

We’re doing really well on the sequencing side in terms of capacity growth. We don’t need, right now at least, to add more shifts but we do have the ability to do that if we have to. The product is at a point where it’s beginning to become very stable in terms of the design changes going into the product and so I think we’re going to get more efficient as we go forward which will allow us to produce more instruments per unit of labor that we put in. So, we’re feeling overall really good about what Dean and Hayward’s been able to do on the manufacturing side.

William Quirk – Piper Jaffray

Then Christian just to flush out an earlier question, can you give us an idea what the legal spend was related to Affymetrix during its entirety in fiscal 07?

Christian O. Henry

Actually, we haven’t disclosed it. It’s probably not appropriate to disclose it here.

William Quirk – Piper Jaffray

Then just a quick housekeeping question, Jay the internal data where you’re generating 3 gigs consistently, presumably this is with [inaudible]?

Jay T. Flatley

Yes.

Operator

Our next question comes from the line of Un Kwon with Pacific Growth Equities. Go ahead.

Un Kwon – Pacific Growth Equities

I was wondering, you had indicated that you had record Bead station sales in the quarter. Could you give us an idea of where these new units are being placed? Are they more internationally? Or, is it current customers adding additional capacity?

Jay T. Flatley

It’s all of the above. We continue to get additional orders from existing customers who want to do more and do it faster. We’re seeing really a broadening of the market as the applications broaden so customers buying units for a particular new application, things that we launched on the system. And, the geographic distribution is pretty much along the normal lines of our business overall so no strong biases one way or the other geographically.

Un Kwon – Pacific Growth Equities

Secondly, can you talk about AFP trends for your BeadChips especially as iSelect and your multi sample become a larger component of your revenue? Do you see AFPs generally going up for your product and gross margin expansion along with that? Or, do you see it stable?

Jay T. Flatley

On a sample basis over time we expect the AFPs to continue to decline and that’s really what’s driven the growth of the genotyping market as we and others have continued to be able to drive down the price to analysis a single sample for the customer. Overlaid on top of that is of course our multi sample strategy which allows us to take the overall price per BeadChip and once we do a doubling then we get a lot more value per single BeadChip and that sort of has this digital component on it that overlays the gradual decrease on the per sample basis on the market place. So, if you look at sort of what’s happening right now the price per BeadChip is relatively stable. It will probably drift up over the next couple of quarters as we launch the new products and then gradually drift down as we introduce new products, go back up as we introduce new products I should say.

Operator

Our next question comes from the line of May-Kin Ho with Goldman Sachs. Go ahead.

May-Kin Ho – Goldman Sachs

Most of my questions have been answered but in terms of the life sciences versus the diagnostic businesses can you talk a little bit about what the three top priorities would be for the diagnostic business in the coming year?

Jay T. Flatley

Well, let me give you the top priority May-Kin and maybe I’ll stop after the top one and that is to make sure we have a very well defined articulated and executable strategy in place for diagnostics. As you know, it’s a market with lots of opportunities but lots of competitors and so we have initial work we’re doing in the things we’ve talked about publically such as the relation with [inaudible], what we’re doing on the BeadExpress platform but, the strategy needs to go well beyond that in terms of very clearly understanding where we can have competitive advantage and take advantage of the other technologies in the company we have to build that competitive advantage. So, that’s really what we’re going to be focused on over the next six to 12 months is getting that strategy defined and getting the execution programs underway to get it done.

May-Kin Ho – Goldman Sachs

Do you think you will need a partner on the instrument side?

Jay T. Flatley

Not likely. BeadExpress is a very capable instrument for doing low multiplex genotyping expression and other applications so we think we have that covered and clearly, there’s going to be a large and emerging market for sequencing diagnostics as well and we clearly have the platform technology to do that. It may not be the existing version of the instrument that would do diagnostic sequencing but certainly we wouldn’t need a partner to develop that. Where we may look to partner in the future would have to do more with potential content acquisition or maybe in some cases selected distribution.

May-Kin Ho – Goldman Sachs

On the Genome Analyzer if you look at the way the genome centers, how they use the instruments or the technology, can one think about different amount of consumables that they’ll be using per instrument?

Jay T. Flatley

You mean versus a non genome center?

May-Kin Ho – Goldman Sachs

Right.

Jay T. Flatley

Yes. What you’re likely going to see is you’ll see a somewhat lower utilization in non genome centers. But, most of the customers that buy these instruments there’s so many exciting things to do with them that they’re going to keep them pretty busy we suspect. So, it’s not going to be the case that someone will buy an instrument and use it 20% of the time and that’s true because the runs aren’t a half hour long like they are in some arrays. You turn on the instrument and it takes three days to five days to complete a run and so what that means is that the overall utilization rate probably across the whole installed base is going to be more level than perhaps you would see on a BeadChip scan.

May-Kin Ho – Goldman Sachs

Lastly, just a housekeeping question, on the revenues for this past quarter was any currency impact?

Christian O. Henry

No, we’re still booking most of our revenue in US dollars so we really didn’t have any currency impact in the quarter.

Operator

Ladies and gentlemen that does conclude the time we have available for questions tonight. I’d like to turn the call back over to Mr. Froman for any closing remarks. Please proceed sir.

Peter J. Froman

As a reminder a reply of this call will be available in webcast format on the investor section of our website as well as through the dial in instructions contained in today’s earning release. Thanks for joining us today. This concludes our call and we look forward to our next update following the close of the first quarter.

Operator

Ladies and gentlemen thank you for your participation in today’s conference. That does conclude the presentation. You may disconnect. Have a wonderful day.

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Source: Illumina Q4 2007 Earnings Call Transcript
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